Longshore and Harbor Workers' Compensation: Understanding the Exposure

Workers compensation becomes more complicated when employees perform maritime work on or near navigable waters.

The Longshore and Harbor Workers' Compensation Act, commonly referred to as the LHWCA or Longshore Act, is a federal law that can provide workers compensation benefits to certain maritime employees.

The exposure can affect businesses involved with shipyards, docks, terminals, marine construction, cargo handling, vessel repair, and other operations connected to navigable waters.

Determining whether the Act applies is not as simple as asking whether an employee works near water. Coverage questions generally involve both the type of work being performed and where the work occurs.

A business may therefore have employees covered by a state workers compensation system, employees subject to federal maritime requirements, or a combination depending on its operations.

This distinction matters because an ordinary state workers compensation policy should not automatically be assumed to satisfy every federal maritime obligation.

The consequences of an uninsured or improperly insured Longshore exposure can be significant. Employers may face benefit obligations, penalties, litigation, or contractual problems if required coverage was not arranged.

Businesses should pay particular attention when beginning work at ports, docks, shipyards, terminals, waterfront construction sites, bridges, or other locations where employees may perform maritime-related duties.

Contract requirements can also reveal an exposure. A project owner or hiring contractor may require proof of Longshore coverage before allowing work to begin.

Other federal laws can affect certain specialized operations, including work performed overseas under government contracts or work connected to offshore resources. These exposures should be reviewed individually.

Job duties matter. So do temporary assignments. A company that does not consider itself a maritime business may still create a Longshore question when employees are sent to perform particular work at a covered location.

Before starting a waterfront or maritime project, employers should describe the work, locations, employee duties, contracts, and use of subcontractors to an insurance professional familiar with workers compensation and maritime exposures.

The goal is to determine the applicable requirements before an injury occurs rather than discovering after a claim that a different form of workers compensation protection was needed.